Two of the malls built in Little Rock during the worst recession since the 1930s have each fared differently. One, the Promenade at Chenal, is doing nicely, with its occupancy rate about 90 percent.
The other, Shackleford Crossings, is not doing nearly as well. The occupancy rate for its 271,000-square-foot core is about 75 percent.
Those two retail centers were among five that opened in Little Rock a little before or during the latest national economic recession, which officially lasted from December 2007 until June 2009. And so they dealt with their developments and leasing in fits and starts.
Malls and shopping centers across the nation have rebounded from the recession, said Jesse Tron, spokesman for the International Council of Shopping Centers. They are “back to pre-recession levels,” he said. The 1,500 malls in the country are at 94 percent occupancy, he said. There are 115,000 shopping centers and malls collectively, Tron said. Their collective occupancy rate is 92 percent.
Net operating income stands at $475 per square foot, the highest since the council started keeping records in 1996, Tron said.
More good news is that retailers are looking to open stores in existing space “and that’s what is helping the occupancy rate in our malls and shopping centers.”
That bodes well for Shackleford Crossings, whose center is not living up to expectations, though its outparcels — at the shopping center’s outer edges — have done well. There are six restaurants fronting the mall along South Shackleford Road. And construction is underway on a five-story Hilton Home2 Suites.
Retail Connection and Invesco, both of Dallas, purchased the 271,000-square-foot center of Shackleford Crossings and outlying undeveloped property in July 2011 for $42 million after Clary Development declared bankruptcy. Repeated calls to the developers were not returned.
Outparcels are also are doing well on the fringes of the Promenade at Chenal in west Little Rock.
HomeGoods, a furnishings store, will open a 24,000-square-foot, free-standing building on the eastern end of the property in the fall.
An 8,000-square-foot, free-standing building is going up on the northwest corner of the Promenade.
The 90 percent occupancy rate at the Promenade is a figure, as with the one for Shackleford Crossings, that was calculated based on website maps and firsthand observation.
Outparcel construction might be saving the day at Shackleford Crossings, but such development at Promenade raises questions.
There is plenty of space in the 306,000-square-foot Promenade to accommodate the stores that are choosing instead to move into buildings close by.
So why are they building at the fringes of the Promenade?
Partly because that’s the way HomeGoods does it.
Partly because the configuration of the available space doesn’t appear to fit the needs of Thompson Thrift development of Terre Haute, Ind., which is erecting the smaller buildings for four clients.
Three of the clients are under contract-AT&T General Nutrition; and Boneheads, a fish and chicken grill. A fourth is expected to sign on soon, said Sara Lindsey, vice president for marketing for Thompson Thrift.
RED Development of Overland Park, Kan., which opened the Promenade in 2008, would not comment about its plans for the remaining eight outparcels, saying in an email only that “some retailers and restaurants have a preference for being inside a retail center and others prefer to locate on pads nearby – it really depends on the retailer’s business model. We try to accommodate our retail partners in their location preferences.”
The three other malls that were built in the city in the past decade are Midtowne Little Rock and Park Avenue — both bought this year by Inland Real Estate Income Trust of Oak Brook, Ill. — and Pleasant Ridge Town Center.
Park Avenue, on University Avenue south of Markham Street, was developed by Strode Property Co. of Dallas. Inland Real Estate said when it announced its purchase of the 69,381-square-foot retail center that occupancy there was 95 percent. That sale did not include a Target store and an LA Fitness center, nor did it include the 258-unit Park Avenue Lofts. Strode owns some undeveloped property in the center.
Park Avenue got underway in 2010 with the opening of the long-awaited, 137,000-square-foot Target.
The last of four apartment buildings in that area was finished in December, and the overall occupancy is 87 percent, said April Rowton of the Hanover Co., which manages the apartments for Lang Partners LLC of Dallas.
Midtowne, at Markham and University, had a 95.6 percent occupancy rate when it was bought in May from Strode Properties of Dallas, said Alyssa Templeton for Inland Real Estate.
Strode opened the 130,000-square-foot property in 2006 at a cost of $35 million and sold it to Inland Real Estate for $41.5 million.
Developer Lou Schickel says his 300,000-square-foot Pleasant Ridge Town Center on Cantrell Road west of Interstate 430, which started opening stores in 2006, is “99 percent” occupied.
Yet, Schickel is not complacent about that figure. He looks down the road and knows that the Outlets at Little Rock, which is scheduled to open next July in the Gateway Town Center, stands to have 75-80 stores, all competitors.
The outlets mall, he said, “may be good for the economy,” but it’s a threat to established retail centers.